IXP advisor recruitment: Reimagining the cycle

Recent studies show an expected shortage of more than 100,000 advisors over the next decade. Succession planning challenges and strong competition for talent have the potential to leave advisor-led distribution channels in a quagmire.

To address that challenge, advisor-led channels must develop a strategy to recruit and retain talent to compete in the market.

One way to do that is to develop a recruitment strategy focused on inexperienced hires (IXPs). IXP pipelines typically center around two target markets:

1. Recruiting college seniors and recent graduates.
2. Recruiting individuals interested in a career change.

Carriers and channels typically rely on a similar strategy – recruit mass numbers of IXPs, provide basic training and then see who remains over time. This strategy has had middling results. LIMRA studies show an average four-year insurance agent retention rate of only 9%.

This suggests several challenges and obstacles.

• Selection challenge: Distributors are struggling with being able to identify the right talent. Talent selection is two-fold – identifying individuals who have the capabilities to succeed while also evaluating individuals that are a fit for the firm. This is driven in part by resistance to data-driven recruitment, instead favoring outdated assessments or “gut” feelings.
• Training challenge: Even if distributors can select the right talent, there is still the obstacle of training new advisors. Training quality can vary significantly, both at the enterprise and field levels.
• Lack of personalization: IXP training is not typically adapted to the individual. Instead, it focuses on broader concepts that may or may not be relevant to the advisor. The inability to get tailored support to the IXPs struggles contributes to retention struggles.
• Financial investment: Some carriers, particularly in the career agent model, may financially invest in their IXPs, either through loans/draw or through salary to prop them up. That can be particularly problematic when advisors leave, making the investment difficult to recover.

To win this battle, advisor-led channels mustfuture-proof their IXP recruitment process. This begins with reimagining value proposition – what is the reason an IXP should become an advisor with you?

Although the answer will vary by firm, there are key questions that every firm must be able to answer in developing their overall IXP recruitment and retention strategy.

1. What career opportunities exist for IXPs?

A Gallup poll showed that approximately 66% of workers aged 18-24 ranked learning and skillset opportunities as a Top 3 work benefit/perk. Other polls show lack of career path is another reason for advisor attrition. Carriers must accept that IXP recruiting is not in a vacuum – instead, it is a part of a broader competition for talent. Someone who is not a great advisor may be a great wholesaler.

2. Who is the right person for my firm?

Carriers and firms sit on troves of recruiting data that can be used to understand the advisor profile of individuals who tend to be successful in the firm. Some carriers identify key metrics and data points to develop successful advisor profiles. Improving selection upfront in the recruiting process will improve overall retention rates.

3. What does mentorship and training look like for IXPs?

Every carrier and agency will have different mentorship and training models. Some will use standardized onboarding at the carrier level, while others will rely on a traditional sales manager/general agent training model. No matter what the model, firms must consider using technology to supplement the existing training model to provide increasingly personalized training solutions. For example, carriers may consider promoting suggested training modules leveraging data from an advisor’s recent sales activity.

4. What is your firm’s competitive advantage?

Confronting the advisor shortage requires strong recruitment practices, but the punctuation to those recruitment strategies will be the ability to retain the talent you want. Most firms will focus on competitive compensation, but the best strategy will focus on developing a stronger value proposition. Carriers and firms should evaluate developing the advisor of the future – shifting away from ease of doing business (making it easier to submit business) and focusing on the ease of growing business (rethinking how an advisor establishes and grows their book of business).

Reimagining IXP recruitment

Improving IXP recruitment will prove critical to carriers and firms – not just in the battle for talent, but also in the competition for customers. Carriers must reimagine their IXP strategies considering this new reality and develop a comprehensive talent management and lifecycle approach that incorporates recruitment, training and retention of valuable new recruits. For those who make the appropriate investment, the rewards will be worth it: greater customer retention, reduction in lost investment, and greater profitability.

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Chris Taylor is an established leader in the insurance industry with more than a decade of experience supporting insurance strategy and performance improvement outcomes. Contact him at [email protected].